Politics
Brit couples to be hit with extra £5,500 tax bill after National Insurance hike
BRIT couples are set to be hit with an extra £5,500 tax bill after the National Insurance hike, new analysis has shown.
National Insurance tax rose by 1.25 percentage points last month – and will cost working families hundreds of pounds extra a year.
GettyBrit couples are set to pay thousands more in National Insurance over a ten year period as a result of the hikes[/caption]
The controversial hike means someone earning £20,000 will pay £130 extra each year, while someone on £60,000 will pay £630 more.
And over the next ten years, an average couple earning a combined salary of £72,000 will pay around £5,550 in additional tax.
According to a House of Commons library paper, commissioned by the Liberal Democrats, those couples would earn an original income of £717,640 over the next decade.
They would be billed about £5,550 in extra tax as a direct result of policies introduced since 2021 – namely the National Insurance increase and freezing of the income tax personal allowance, The Telegraph reports.
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The calculations factor in Rishi Sunak’s promise to cut the basic rate of income tax from 20p to 19p in 2024.
Ed Davey, the Lib Dem leader, said of the figures: “Now is not the time to be hiking people’s taxes, just as energy bills and inflation go through the roof.
“People are facing a cost-of-living emergency, and they need an emergency tax cut now.”
The treasury insists the new measures are needed to fund NHS spending – despite Tory MPs and opposition parties putting pressure on ministers to drop taxes amid the cost-of-living crisis.
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Downing Street is instead focused on introducing “non fiscal” measures to reduce the costs for Brits, such as removing red tape that drives up the cost of childcare.
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A Government spokesman said: “We understand that people are struggling with rising prices, and while we can’t shield everyone from the global challenges we face, we’re supporting British families to navigate the months ahead with a £22 billion package of support this financial year.
“That includes cutting taxes for working people by raising the National Insurance Contribution threshold, saving the typical employee over £330 a year; lowering the Universal Credit taper rate to help people keep more of the money they earn; and providing millions of households with up to £350 each to help with rising energy bills.”
How much National Insurance will I pay?
The amount of National Insurance you pay depends on how much you earn, with higher earners paying more.
Currently, someone earning £15,000 a year pays contributions of £652, while another earning £25,000 is taxed £1,852 each year.
Figures from accountancy Blick Rothenberg for The Sun show how these NICs will go up with the new hike.
On earnings of £10,000, it will be £5 a year more, and on earnings of £25,000, £193 more.
National Insurance payments on earnings of £35,000 will increase by £318 a year, and on a salary of £50,000, they will go up by £505.
The increase is likely to hit those on lower incomes harder compared to the wealthier in society, the accountancy firm said.
That’s because contributions are calculated on a weekly or monthly basis, so seasonal workers or those on zero hours contracts may have to pay despite earning less than the annual threshold.
National Insurance is not the same as income tax, and you pay this separately on your earnings too.
